Adani, JSW in race for APM’s Gateway Terminals stake

APM Terminals is in talks with Adani Group and JSW Group to sell the Dutch company’s 74% stake in Gateway Terminals India Pvt. Ltd (GTI), three people familiar with the discussions said.

“APM Terminals, as part of its parent AP Moller-Maersk Group’s global portfolio rejig exercise, has decided to fully divest its stake in Gateway Terminals for which it has started initial discussions with both the Adani and the JSW groups,” one of the three people said on condition of anonymity. Gateway Terminals, in which Container Corp. of India Ltd (Concor) owns the remaining 26% stake, is India’s largest container terminal, accounting for almost a fifth of the country’s container traffic. Concor’s annual report for financial year 2015-16 reveals that Gateway Terminals had reported a profit of Rs31.4 crore on revenue of Rs410.6 crore during the year.

“The JSW Group is very keen on picking up APM Terminals’s stake in Gateway Terminals, given that it currently operates just a minor port at Jaigarh with barely any container handling capabilities. The Adani Group, on the other hand, is looking to further consolidate its position as the country’s top private port operator,” one of the persons mentioned above added.

In response to a query, a statement from APM Terminals said: “In the normal course of business, APM Terminals’ strategy is to continuously review and optimize its existing global portfolio as well as explore new investment opportunities. We are always looking at opportunities to grow the business and improve shareholder value. We do not comment on market rumours and speculation.”

The interest being shown by Adani and JSW to buy APM Terminals’ stake seems natural, given the dominance of Jawaharlal Nehru Port Trust (JNPT), where Gateway Terminals is located, in Indian container trade. According to the Indian Ports Association (IPA), JNPT accounted for over 43% by tonnage and more than 53% by 20 feet equivalent (TEUs) of the total container traffic handled by Indian major ports during the first four months of the current fiscal year.

“Gateway Terminals is a build, operate and transfer project that has been profitably operational for over a decade and is the perfect asset for anyone interested to have a major presence in the country’s container handling market, more so if one considers the rising trend of containerization in India’s trade,” said a person quoted above.

JSW and Adani groups didn’t respond to emails and phone calls made on 8 August.